High Deductible Health Plans: Why They May Cost You the Healthcare You Need

These plans save money up front, but is it worth it?

You’re young and healthy
— or maybe you’re just short on funds — so you got a health insurance
policy with low monthly premiums and a high deductible. Then you messed up your
knee, or started having
symptoms of heart trouble. But you postponed seeing a
doctor because of what it would cost you.

That scenario is
increasingly common. For the first time in 50 years, 90 percent of Americans
have health insurance, but the growing popularity of high-deductible plans is
forcing people to skip or skimp on needed health care, according to recent
research.

Nearly
30 percent of people with high-deductible health plans ($1,500 or more per
person) went without medical care because they couldn’t afford it, according to
a
May 2015 study from Families USA, a
nonpartisan healthcare policy group based in New York City. And 14.2 percent of
them bypassed the prescriptions drugs they needed as well.

High-deductible
plans may work well in some cases. Some people are able to set aside savings
and spend on healthcare until they meet their deductible, says
Cheryl Fish-Parcham, MSW,
private insurance program director for Families USA. “They do fine in high
deductible plans,” she says.

But she notes the plans are
bad news for people without sufficient savings. “The cost of care before reaching the deductible really deters them from
getting care,” says Fish-Parcham. “They can’t afford it.”

Other consumer advocates agree.
“There are very few pros. The reality is that people are stretched buying these
plans in the first place. Now they are digging into their pockets for a $6,000
deductible before they are even covered,” said Edward Barrera, healthcare
advocate and capitol watchdog director for the nonprofit advocacy group
Consumer Watchdog,
based in Santa Monica, California and Washington. “Basically, these deductibles
are the hidden barriers to gaining access to healthcare.”

And high deductibles are
getting higher. A recent review of plans offered via the HealthCare.gov federal
marketplace found that more than half of the plans offered in many states
have a deductible of $3,000 or more.

Employers are also fueling the trend as they seek to reduce their spending on
healthcare by shifting more of the burden to employees. Some 46 percent of all employees
(and 63 percent of employees in small firms) have deductibles of $1,000 or
more, according to
The Henry J. Kaiser Family Foundation 2015 Employer Health Benefits Survey. The average deductible of $1,077 has
climbed 255 percent from $303 in 2006.

What to consider before you choose a plan

If you’re leaning toward a
high deductible plan to save on costs, keep these tips in mind.

Look for a
plan that waives deductibles for chronic conditions like diabetes
. Families USA’s Fish-Parcham says some
forward-looking plans are lowering co-payments and waiving deductibles to
ensure patients with chronic conditions, such as
diabetes, high blood pressure and
asthma, don’t neglect their health.

Read the fine print. Even
though the Affordable Care Act (ACA) has limited the out-of-pocket maximum that
a Marketplace plan can charge an individual
to $6,850
a year in 2016
($13,700 for a family plan), some insurance
companies have found a way around this by excluding the deductible from the
out-of-pocket maximum, according to U.S. News and World Report. That means if
your deductible is $5000 and your out-of-pocket maximum is $5500, you would
have to pay $10,500 before your health plan covered all your expenses.

Create
a health savings account (HSA).
If you do have a high
deductible health plan and no other health insurance, you may want to create an
HSA. You can use your HSA to pay out-of-pocket medical expenses tax-free. The
contribution limit is about $3,350 per individual and $6,650 per family. And unlike
flexible spending accounts (FSAs), you can keep the money you've saved in
an HSA if you retire or change employers, and you can roll over any dollars you
haven't spent from one year to the next. (Just don’t spend the money on
anything besides health care or you’ll have to pay taxes on it.)

Know
that some services are fully covered, even before you pay your deductible
. Most
plans, for example, must cover preventive services, such as
vaccinations and many
types of
screenings (including mammograms), at no charge to you.

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Daniel S. Levine is an award-winning journalist who heads the Levine Media Group and hosts The Bio Report and RARECast podcasts. He was an editor of The Burrill Report and worked for the Oakland Tribune, Adweek, the San Francisco Business Times and other publications.